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Top Unions Accuse Trump of Exploiting Loopholes in Covid-19 Stimulus to 'Enrich Corporate Executives'

"The Trump administration has, once again, shown complete disregard for the well-being of working families and failed to implement any requirements that would benefit workers."

Activists with Black Lives Matter D.C., 1199SEIU, and ShutDownDC hold up a sign as they participate in a protest to highlight the plight of vulnerable community members, including immigrant workers and people in jails, prisons, and ICE detention centers on Monday, April 27, 2020. (Photo: Caroline Brehman/CQ-Roll Call, Inc. via Getty Images)

Leaders of some of the largest labor unions in the United States are warning that the Trump administration is brushing aside the interests of workers in its distribution of trillions of dollars in coronavirus bailout funds and instead using the taxpayer money to further enrich wealthy corporate executives.

As funds authorized by the multi-trillion-dollar CARES Act begin to fly out the door, the unions wrote in letters (pdf) to Democratic leaders Monday that they "are troubled that important worker protections are not being required of recipients."

"Specifically, we are alarmed that the Federal Reserve's lending facility for large businesses does not require those companies to maintain workers on payroll, while the program for mid-sized businesses fails to include anti-outsourcing provisions or any provisions protecting workers' right to organize," the unions wrote. "This means that, rather than protect good, family-supporting jobs as you intended, the funds can be used to enrich corporate executives and shareholders without regard for workers."

"We cannot yet again have the federal government bailing out corporations and major employers and leaving workers with no meaningful protections."

The unions sent the letters to House Speaker Nancy Pelosi (D-Calif.), Senate Minority Leader Chuck Schumer (D-N.Y.), and Sen. Sherrod Brown (D-Ohio.). The letters' signatories include Dan Mauer of the Communications Workers of America, Tor Cowan of the American Federation of Teachers, and John Gray of the Service Employees International Union.

The CARES Act, which President Donald Trump signed into law last month, contains some restrictions on corporate recipients of federal bailout funds—including limits on layoffs, stock buybacks, and executive compensation—but the law also empowers Treasury Secretary Steve Mnuchin to waive those restrictions, effectively rendering them meaningless.

"We were happy to see that one of the provisions of the CARES Act required that most employers receiving taxpayer funds would be required to keep 90% of their employees on payroll," the unions wrote Monday. "Unfortunately the Trump administration and the Federal Reserve effectively waived any requirement to maintain workforces at companies receiving aid."

"The Treasury Department, meanwhile, has failed to follow guidance under the CARES Act protections for airline payrolls, potentially risking good jobs in those sectors, as well," the unions said.

The unions' warnings came as progressives continue to raise alarm about how the trillions of dollars in corporate bailout funds are being utilized, particularly given that the limited oversight mechanisms established by the CARES Act are not yet fully functional.

The Federal Reserve has committed to making public the names of companies that receive bailout money, but the central bank has not said it will release the terms and conditions of the taxpayer loans.

The unions demanded Monday that Democratic lawmakers work to guarantee that any future stimulus package contains enforceable restrictions to protect workers and prevent profiteering by corporate executives.

"We urge you to ensure that any future legislation responding to the pandemic and the economic fallout includes not only robust worker protection provisions, but that those provisions are binding and enforceable on recipients of federal taxpayer assistance, without the loopholes in the CARES Act that the Trump administration has exploited to undermine them already," the labor leaders wrote.

"We cannot yet again have the federal government bailing out corporations and major employers and leaving workers with no meaningful protections," they added.

Read the full letter to Schumer and Brown:

On behalf of our millions of members, thank you for the leadership that you have shown during these extraordinarily challenging times as our country battles the COVID-19 pandemic. We especially want to thank you for your efforts to prioritize workers and worker protections during the drafting of the CARES Act and your continued efforts to provide help to the millions of workers across the U.S. who are suffering from this pandemic and the economic fallout.

Unfortunately, as the implementation of the legislation is carried out, and funds are beginning to flow to various employers and corporate entities, we are troubled that important worker protections are not being required of recipients. Specifically, we are alarmed that the Federal Reserve's lending facility for large businesses does not require those companies to maintain workers on payroll, while the program for mid-sized businesses fails to include anti-outsourcing provisions or any provisions protecting workers' right to organize. This means that, rather than protect good, family-supporting jobs as you intended, the funds can be used to enrich corporate executives and shareholders without regard for workers.

We know that you share our belief that the most important step that Congress can take is to ensure that federal taxpayer funds are used first and foremost to keep employees on payroll. Ensuring that workers keep their jobs and the economic certainty those jobs provide is critical to blunting the impact of the economic fallout from this pandemic on the overall U.S. economy. That is exactly why we were happy to see that one of the provisions of the CARES Act required that most employers receiving taxpayer funds would be required to keep 90% of their employees on payroll.  Unfortunately the Trump  Administration and the Federal Reserve effectively waived any requirement to maintain workforces at companies receiving aid. The Treasury Department, meanwhile, has failed to follow guidance under the CARES Act protections for airline payrolls, potentially risking good jobs in those sectors, as well.

Meanwhile, the importance of workers being able to form a union and have a voice in their workplaces has been made abundantly clear during this pandemic. The protections provided by union contracts and the ability of unionized workers to speak out on the job without fear of employer retribution allow millions of front line essential workers to shape workplace policies that not only protect their health and safety on the job during this pandemic, but the general public as well.  Moreover, union contracts also provide important protections for workers unable to work during the crisis. The CARES Act could be used to require mid-sized employers receiving taxpayer funding in response to the pandemic to remain neutral when their employees choose to exercise their legal rights to organize into a union. Again, the Trump Administration and the Federal Reserve are apparently choosing not to make any requirements related to neutrality in union organizing efforts.

Given the extraordinary nature of the support that the federal government is providing for the private sector through the CARES Act, the intent of the CARES Act to protect good jobs as a condition of receiving aid were a completely reasonable effort to ensure that taxpayers money is used well. We have been highly disappointed that the Trump Administration has, once again, shown complete disregard for the well-being of working families and failed to implement any requirements that would benefit workers.

As powerful voices and leaders in the U.S. Senate for working families, we urge you to take steps to ensure that the worker protection provisions are actually imposed on recipients of federal aid in response to the current pandemic. In addition, we urge you to ensure that any future legislation responding to the pandemic and the economic fallout includes not only robust worker protection provisions, but that those provisions are binding and enforceable on recipients of federal taxpayer assistance, without the loopholes in the CARES Act that the Trump Administration has exploited to undermine them already. We cannot yet again have the federal  government bailing out corporations and major employers and leaving workers with no meaningful protections.

Thank you again for your leadership in working to incorporate worker protections into the CARES Act and thank you in advance for working with us to ensure that those protections become reality for working families across the country going forward.

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